Global Development in a New Era of Global Health Financing
Julien Willard, MD MPH
Life Sciences Strategist | Health Economist, Clinician | Former Diplomat | Board Member
On February 8, I attended an event in New York hosted by the UBS Optimus Foundation and the U.S. Agency for International Development’s (USAID’s) Center for Accelerating Innovation and Impact. The event demonstrated that the global development community has concluded that the private sector is indeed a key partner to the achievement of the Sustainable Development Goals (SDGs). The event highlighted the recently launched Utkrisht Impact Bond, a development impact bond aiming to reduce maternal and newborn deaths in India, which is led by a public-private partnership including UBS, USAID, Merck for Mothers, PSI, Palladium, HLFPPT, and the government of Rajasthan, India.
Achieving impact in a changing financial landscape
The last two decades have been coined the “golden age” of global health financing. However, at $37.6 billion, 2016 marked the third year of relatively little growth in development assistance for health, supporting predictions that external funding is unlikely to continue to grow at the rate seen in the early 2000s. Such investments from national treasuries (primarily the USA and UK), philanthropies, and development agencies have led to a 40% reduction in under-five child mortality, 35% reduction in the incidence of HIV, and almost halved mortality from malaria.
A changing landscape of global health finance, compounded by the systemic challenges and market failures that increase financial risks and costs, demands new financial solutions. The visual below shows that external financing needed to support health SDGs currently exceeds existing resources.
Innovative finance is now recognized as a central solution to filling the funding shortfall and accelerating the deployment of business solutions to development challenges. Innovative finance for development is defined as a complementary source of capital to traditional development finance and a way to make development projects more effective and efficient by redistributing risk and improving the availability of working capital.
This article was written by Oleg Kucheryavenko. The views expressed in the article are the author's only and not those of the World Bank Group.